Sleep: How does it benefit you?

Sleep. It’s something we all do and it has a huge effect on our daily life. We’ve all had a bad night’s sleep and woken up feeling unmotivated for what’s ahead. But how does sleep benefit you?

We spend around a third of our lives asleep; it’s an essential part of our routine. We’ve all felt dazed or unproductive when we’ve not gotten enough of it. Whilst we often look peaceful sleeping, our bodies are actually working hard. So, what benefits does sleep bring you?

1. Reduces stress

We’ve all had a poor night’s sleep in the past that has left us feeling irritable and frustrated. If your body doesn’t get enough sleep, it elevates the levels of stress hormones. Naturally, that can mean you find situations you normally handle well more stressful. Unfortunately, stress can make it even more difficult to drift off. Taking some time to relax and clear your mind before bed can help here.

2. Help maintain a healthy weight

Unfortunately, a good night’s sleep isn’t a substitute for a healthy diet and exercise. But it does play a role in maintaining your weight. Hormones that regulate your appetite and reduce cravings for unhealthy foods that you might be tempted to reach for increase when you don’t get enough sleep, so you will often feel hungrier. This is due to your body producing more of a hormone called Ghrelin, which stimulates appetite and promotes fat storage.

3. Improve your memory

Scientists used to think our brain switched off and rested when we were asleep. But, in fact, the opposite is true. Sleep gives your brain a chance to organise and store memories. As a result, being well-rested can help improve your memory and quickly recall experiences. This is part of the reason why we sometimes struggle to remember things when really tired, it’s your body’s way of telling you it’s not getting enough sleep.

4. Support your immune system

Our immune system is an essential part of staying healthy and fighting off infections. Whilst you’re sleeping your body is producing extra protein molecules that can give your immune system a boost and improve the odds of remaining fighting fit. If you feel run down or have a cold you’ll often want to spend the day sleeping, this is the reason why.

5. Lower your blood pressure

Sleep puts you in a state of relaxation. As a result, it can help reduce blood pressure and keep it under control. If you suffer from high blood pressure, it can increase your chances of having a heart attack and stroke. Of course, improving sleeping habits shouldn’t be used in place of blood pressure medication you take but used to supplement it.

6. Keep your heart healthy

Linking with the above benefit, sleep helps to keep your heart healthy too. Lower levels of stress and controlled blood pressure can help maintain a healthy cardiovascular system.

7. Puts you in a better mood

Finally, being well-rested simply makes us feel better. We’ve all had experiences of waking up and not feeling ready for the day after a poor night’s sleep. In contrast, you’ll feel more productive, controlled and in an overall happier mood when you’ve had just the right amount of sleep.

Tips for getting a good night’s sleep
  • Reduce your exposure to blue light, which is emitted from electronic devices, before bed. The light can trick your body into thinking it’s daytime, making it more difficult to get to sleep. You don’t have to give up your phone or laptop though. There are apps that can block or reduce blue light.
  • Cut back on the coffee. This is one we all know, caffeine can stimulate your body and keep you going when you’re tired. However, did you know that caffeine can have an effect for up to eight hours? If you crave a coffee in the late afternoon, it’s best to stick with decaf.
  • Get into a habit. Where possible going to sleep and getting up at regular times can help create a routine. Sleeping at consistent times can also help you get better quality sleep.
  • Give your bedroom an update. Sometimes it’s your environment that makes it difficult to drift off. Creating a relaxing environment is essential. That includes reducing noise, getting the temperature just right, and minimising light where possible.

7 non-fiction books to add to your reading list

Are you looking for a new book to curl up with over the winter? In 2019, there have been some excellent non-fiction additions to inspire and entertain you. We’ve got seven books you may want to think about adding to your bookshelf (or Christmas list) this year.

1. Lunch with the FT: A Second Helping, Lionel Barber

The famous ‘lunch with the FT’ column has featured a wide range of interesting people over the last 25 years, from intellectuals to film icons. This book brings together some of the most fascinating interviews from the last five years. If you’re a regular reader of the FT or simply want to learn more about those mentioned in the pages, this is a great book for you. From Edward Snowden to Donald Trump to Zoella, you’ll find plenty of interviews to capture your attention from the list no matter what you’re looking for.

2. The Uninhabitable Earth, David Wallace-Wells

Covering one of the most widely covered issues today, climate change, The Uninhabitable Earth certainly isn’t a light-hearted read. David Wallace-Wells explores the worst-case scenario bringing together different strands of scientific research. It’s a warning and call to action, but still a fascinating read. It gives a stark assessment of who will benefit from climate change and just how close a changing world could be, potentially affecting the lives of children and grandchildren.

3. Gotta Get Theroux This: My Life and Strange Times in Television, Louis Theroux

Are you a fan of Louis Theroux’s documentaries? If the answer is ‘yes’ this book should definitely be on your list. Known for expertly coxing interviewees to open up about themselves, this time Louis reveals what makes him tick. This book takes readers on a journey through some of his career highlights that immersed viewers in worlds as far-flung as the racist US militias and violent gangs of Johannesburg. It also explores Louis being blindsided by the revelations that came out about Jimmy Savile.

4. Trick Mirror, Jia Tolentino

Trick Mirror is a collection of essays that explores the disorientation of modern life. It’s witty and perceptive as it discusses the current socio-political debate. Among the topics looked at are the internet, feminism and politics, assessing what it means to come of age when the landscape has changed rapidly. It maps out the millennial mindset and demonstrates just how different that can be between generations.

5. Written in History, Simon Sebag Montefiore

If you’re a fan of uncovering history, this is the book for you. It brings together great letters of world history, creative culture and personal life from ancient times to the twenty-first century. With an introduction offering context for each letter, they offer an insight into the writer. With writers varying from Ramses the Great and Emmeline Pankhurst to Stalin and Michelangelo, as well as unknown people in extraordinary circumstances, you can expect inspiring, brutal and heartbreaking stories.

6. She Said, Jodi Kantor and Megan Twohey

The MeToo movement dominated headlines two years ago and still continues to feature today. It all started with the breaking of Harvey Weinstein’s case following decades of sexual assault allegations. She Said goes back to the beginning of the investigation and offers you an insight behind the new stories. It’s written by the two journalists that meticulously worked through the evidence and connections to break the story that has had startling repercussions. If you’ve ever been interested in investigative journalism, this offers a chance to get behind the column inches.

7. Twas the Nightshift Before Christmas, Adam Kay

Mixing gallows humour and heartbreaking stories with ease, medic Adam Kay shares his experience of working in the NHS. On Christmas day, over 1.4 million NHS staff will be heading to work and after delving into his diaries the author shares his anecdotes from working on the frontline at the most wonderful time of the year. There are stories that will make you laugh and others that are truly touching. If you’ve yet to read This is Going to Hurt, the first book by Adam Kay, we’d recommend adding that to your reading list too.

The pay gap: Does it start before reaching adulthood?

In recent years, we’ve heard a lot about the gender pay gap, from salary to pension savings. But HMRC data reveals that the pension gap starts at a much younger age. Boys are more likely to have had a pension opened in their name before they turn 16 compared to girls. Thanks to the benefits of compound interest and tax relief, this could mean a significant pensions gap before children even apply for their first job.

There are restrictions on how much you can pay into children’s pensions. But even small contributions can make a big difference. As the contributions are typically invested, gaps can widen.

Figures obtained by Hargreaves Lansdown found 20,000 boys under 16 had money paid into a pension on their behalf in 2016/17. This compares to 13,000 girls. Whilst both figures are relatively low, it does highlight the gap.

Nathan Long, Senior Analyst at Hargreaves Lansdown, said: “Parent and grandparents are far more likely to save for boys than girls, so the gender pension gap can start from birth. While women’s paltry pension savings are rightly blamed on the gender pay gap and their greater role in looking after the family, there is another villain in the piece.

“It’s counter-intuitive that there are more pensions for boys as women earn less, take more career breaks, and yet have longer retirements, so need more in their pensions. It’s unclear why this discrepancy exists, although it could be because gifting has come in part from a generation of baby boomers where men are typically more likely to have the lion’s share of pension in retirement.”

So, should you consider paying into a pension for your child or grandchild?

How do children’s pensions work?

People that do not have any earnings can pay up to £2,880 per year into a pension, including children. Contributions will receive a 20% tax relief, boosting the pension further.

The restriction may seem like the savings will add up to little when you consider how much is needed for retirement. But, look at it over the long term, and the impact can be significant. Past research has indicated contributing the maximum annual amount each year could result in a £1 million pension.

According to AJ Bell, depositing the maximum £2,880 for the first 18 years of a child’s life would result in a £105,197 pot. This assumes a 20% tax relief is applied and a growth rate of 5% after fees. That’s a nice sum to hand over to your child. However, as it won’t be accessible, it has decades to grow. Leave it for another 46 years, until the child is 64, without making further contributions and it could have reached £1 million.

It’s a step that can help secure the financial future of your child and ease concerns.

There are three key reasons to consider paying into a child’s pension over alternatives:

  • Tax relief: Pension contributions will receive tax relief at 20% if the person is receiving no other income, as is likely the case for children. It gives your contributions an instant boost.
  • Compound growth: Pensions are a long-term investment product and, as a result, benefit from compound growth. This can help your contributions to grow significantly.
  • Restrict access: Some alternative products will allow your children to take control at 16. However, with a pension you know they won’t be able to access it until retirement age.
Children’s pensions: The pitfalls

Whilst paying into a child’s pension can be an efficient way to save for the long term, it often isn’t the right solution. Pensions aren’t readily accessible and may mean they’re not suitable. Other products, for example, can help children or grandchildren through university or stepping onto the property ladder.

It’s important to fully explore the alternatives before choosing to pay into a pension. Other options may be better for your goals, including:

  • Easy access savings account
  • Cash Junior ISA
  • Stocks and Shares Junior ISA

If you’re saving for a child’s future and want guidance, please get in touch. We’ll help you understand the different options and where contributions can be best used to secure their future.

Please note: A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.

5 ways financial planning can help if you’re self-employed

Millions of people in the UK are now self-employed. Whether you work for yourself or are part of an industry where contracting is commonplace, it can place pressure on your finances. You need to manage your financial situation and potentially plan for periods where you’re not earning an income. Working with a financial planner can give you confidence in your career and future security.

There’s been rapid growth in self-employment in the UK in recent years. According to official statistics:

  • 3 million people (12% of the labour force) were self-employed in 2001
  • By 2017, this had increased to 4.8 million people (15.1% of the workforce)

There are many benefits to being self-employed, but it often means you need to take greater control of finances in order to ensure you meet goals. So, how can a financial planner help you?

1. Paying into and managing a pension

The majority of UK employers will now benefit from a Workplace Pension. However, if you’re self-employed, you’ll need to set up and manage your own pension. Whilst you won’t benefit from employer contributions, you’re still entitled to tax relief. For many self-employed individuals, a pension will be the most efficient way to save for retirement.

There are a variety of ways of setting up your own pension and you may have many questions.

  • Should you invest through a fund or select your own investments?
  • How much should you aim to put away each month?
  • What kind of income will your contributions afford you?

A financial planner can help create a long-term financial plan that considers your lifestyle now and the one you want to achieve in retirement.

2. Creating a financial safety net

When you’re self-employed, there is a chance that your income will stop or reduce. As a result, it’s important to create a financial safety net that you can fall back on should something happen. This could be a period of illness, meaning your income stops in the short term or a contract coming to an end.

Financial planning should give you confidence that you’re financially secure even if these ‘what if’ scenarios did happen. The right solution will depend on you and your priorities. It may involve building up an emergency fund and taking out an appropriate insurance policy, for example.

3. Building suitable savings and investments

We all know we should be putting some of our income aside. But it can be challenging to know what to do with it. Should you hold in cash or invest? There’s no right or wrong answer to this. It’ll depend on your personal situation and attitude to risk.

With so many different providers and products on the market for both cash savings and investments, it can be just as daunting to decide where to put it. Again, this will depend on you and what you’re saving for. If you’re saving for a goal that’s a year away, you’ll need a very different product if you plan to save for 15 years. Our goal is to help clients pick out the right products for them.

4. Getting to grips with tax liability

As you’ll be responsible for organising your own Income Tax, it’s worth spending some time understanding it. There are often steps you can take to reduce your liability depending on your circumstances. However, there are other areas of tax to be aware of too; could your income from investments be liable for tax, for example?

Knowing your tax responsibilities enables you to avoid potentially hefty penalties and set realistic expectations. Tax regulations can often be complex and difficult to apply to your situation. This is where working with a financial planner comes in useful. We’re here to help you get to grips with tax and make the most out of your money.

5. Understanding your long-term goals

Financial planning isn’t just about looking at figures though. It helps you to see how your money habits can help you achieve short, medium and long-term aspirations. People often know what they want in the short term, but planning further ahead can be difficult.

If you’re self-employed, it’s worth thinking about whether you ever want to return to traditional employment, when you’d like to retire, and what the future holds. Talking with a financial planner about your wider goals can help put in place a plan that sets you on the right path.

If you have any questions about the above issues or any other financial matter, please get in touch. We aim to work with all clients, including those that are self-employed, to have confidence in their future.

Please note: A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

The Financial Conduct Authority does not regulate Tax and Estate Planning.

Will Aid month: 5 reasons to review your will now

When was the last time you reviewed your will? If it’s been a while or your circumstances have changed, November is the ideal time to take another look at it. This month marks Will Aid month, aiming to encourage more people to consider their financial affairs and do good for charity.

Will Aid is a partnership between the legal profession and nine UK charities:

  • Action Aid
  • Age UK
  • British Red Cross
  • Christian Aid
  • Save the Children
  • Sightsavers
  • Trócaire

Throughout November, participating solicitors waive their fee for writing a basic will. Instead, clients are encouraged to make a voluntary donation, so your money goes towards helping the above charities. The recommended donation is £100 for a single basic will and £180 for a basic pair of mirror wills. More than £1 million has been raised through Will Aid.

A will is the only way to ensure your wishes are carried out when you die. Despite this, an alarming number of people put off even writing a will. Research from Will Aid found 53% of adults have not prepared a will. Further statistics highlight that it’s not just about passing on your estate. 52% of parents with children under 18 have not assigned legal guardians for them by having a will in place.

Even if you have already written a will, it’s important to review it regularly. Here are five reasons why you may need to review your will now.

1. Your wishes have changed

Quite simply, what you want may have changed. This may be due to a variety of factors and it’s important to review your will in light of this. Your will is the only way to make sure your wishes are carried out and your estate is distributed how you want.

2. You have married or divorced

Your relationship status may have an impact on your will.

Getting married automatically revokes any existing will. Under intestacy rules, which apply if there is no valid will, your husband, wife or civil partner will usually inherit your entire estate. Whilst this may align with what you want, it isn’t always the case. If you have children from a previous relationship, for example, you may want either the entire or a portion of your estate to go to them.

Divorce doesn’t revoke your will but it does affect intestacy rules, as well as how you want your estate to be distributed. Following a divorce, it’s a good idea to review who will inherit your estate and how this aligns with your wishes.

3. You have welcomed new children or grandchildren

Children and grandchildren are often the focus of a will. When you welcome new arrivals, it’s a good reason to adjust your will to ensure they’re included. If you name children and grandchildren in your will, it is possible to make similar provisions for future family members. However, even if you have done this it’s a good idea to check everything is in order. You may also want to update your will to include stepchildren or grandchildren.

4. Your financial situation has changed

Over time, your circumstances will change. It may mean you have more or less to leave behind for your beneficiaries. As a result, how you can distribute your assets effectively may also have changed. For example, if you’ve named certain assets to go to a child, you will want to update your will to rebalance it if the value of the asset has significantly risen or fallen.

5. To reflect changes in tax regulation

Tax regulations can change, and it may mean your estate is liable for Inheritance Tax (IHT). This would mean a portion of your estate goes to the taxman rather than your loved ones. If your estate may be liable for IHT, there are often things you can do to reduce the eventual bill, some of which will rely on your will. If you’re worried about IHT, please get in touch with us.

What to do if your will needs updating

If your will does need updating, you shouldn’t alter the original document. You have two options:

  • Write a new will: The first option is to start afresh. This may be the best option if you have significant changes to make to your existing will. Your new will should clearly state that it revokes all old wills. You should also destroy copies of your old will to avoid confusion.
  • Using a codicil: If just small adjustments need to be made, a codicil may be suitable. This is a separate document used to update your will and should be stored with it. A codicil will need to be signed and witnessed to be valid. There aren’t restrictions on what can be changed in a codicil, but larger changes can make organising your estate complex.

Your will should be an essential part of your financial and estate plan. If you’d like to talk about the wealth and assets you’ll leave behind for loved ones and how to distribute them, please get in touch.

Please note: The Financial Conduct Authority does not regulate Tax and Estate Planning.